Your Income is Powerful

It sounds so obvious but most of us don’t really understand it. Your income allows you to have a roof over your head, a car to drive, and food in your belly. The problem is that the majority of people are using all their income just to live.

Debt is Not a Good Wealth Building Tool

There is no shortage of people teaching that debt can be a great wealth building tool. You especially hear that from people who are trying to sell you a real estate investing program or get rich quick scheme.

It’s true that you can use debt to build wealth. However, it’s a much riskier proposition and never works out as well as debt free investing. A lot of things have to go right when you borrow money to invest. But if just one or two things go wrong (such as a housing bubble or stock market crash), an investment that’s highly leveraged with debt will easily blow up in your face.

In reality, debt (especially consumer debt) is an income destroyer. Debt siphons away your hard earned money in the form of interest and fees. This causes you to spend more on those things you buy using debt. In essence, that extra money you spend for the privilege of financing is a tax on your lack of planning and control over your money.

Most People Can Save Money and Build Wealth

However, a huge number of people save and invest little, if at all. The reason for this paycheck to paycheck lifestyle is because of debt. That’s why having complete control of your money and getting out of debt are extremely important to building wealth for the future.

The Best Way to Accelerate Wealth Building

One of the best ways I’ve found to massively accelerate saving money to invest for the future is to find ways to make more money. Even a little extra income can make a huge difference in your wealth building when it’s allowed to grow over a number of years.

Of course, I’m not talking about making extra income to use for spending money. I’m talking about making extra money that you put straight into savings and investments, in addition to the savings you take out of your primary income.

The Best Wealth Building Tool is Slow and Steady

Although making extra money to save and invest grows your wealth faster, it can still take a number of years to grow a substantial amount of wealth. As a society, we tend to be impatient. We want to see results now, without having to wait years for investments to grow into a large stockpile of wealth.

But trying to get rich quick rarely works. When it does it usually doesn’t last. The best way to grow your money is with slow and steady effort over many years. In fact, this is how Warren Buffett, one of the richest men on earth built his wealth. He started investing with just a few hundred dollars, and 50 years later he’s worth over $60 Billion!